Bluecare Financial Advisors

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The importance of Estate Planning
Estate Planning FAQ

Ever considered the fact that your death could tie up your estate so badly that your family will be left without an income? Or that your business assets could be tied up so tightly that your company cannot operate or remains at the mercy of your unsettled estate?

There's no need to see your life's work go to waste due to a non-executable will. Just plan properly to spare your next-of-kin and business partners as much trauma and inconvenience as possible.

Further,safeguarding the financial interests of your loved ones is your biggest priority when it comes to planning your estate: ensuring that the needs of your family and minors are taken care of, and that estate duty and income tax liabilities are kept to a minimum.

Setting up trusts and draughting wills could be legally complicated. It requires specialised legal knowledge.

When a person dies, there are taxes that are charged. By planning your estate carefully you minimize the tax payable at time of death.By taking a few measurement in time you can save your estate and spouse a lot of money and time.Contact your advisor or Bluecare Brokers to attend to your:

Will
Estate administration
Trust administration
Inter vivos trusts

In a will or by doing estate planning you can predetermine what will happen to all your asset or debt. With putting everything in place you can decrease the time spend on finishing your estate.

Things that happen to your estate on death.

Definition :Estate duty is the tax payable on the dutiable value of an estate.

The first R3 500 000 of the dutiable value of an estate is estate duty free. The amount in excess of R3 500 000 is taxed at a rate of 25%.
In order to calculate the dutiable value of an estate, a number of deductions are allowed: The most important being the one where everything the spouse inherits are not taxed, should the spous die, everything will be liable for estate duty. The deduction is useful in estate planning. It does however mean that an estate duty problem is potentially transferred from one estate to the other, in the sense that the surviving spouse's estate will be liable for estate duty at her/his death.

As a result,the most effective estate planning strategies involve the transfer of assets prior to the death of the estate planner,rather than bequests in the planner's will.

A common strategy to reduce estate duty is to create a trust, and to transfer assets to the trust by means of a sale at market value of the assets. As payment for the assets, the trust creates a loan account in favour of the planner, with no terms in respect of interest. The growth of the assets now falls outside the estate, although the value of the loan account (if no payments were made to the planner) remains an asset in the estate. Where a trust has been created, it is also possible for a planner to reduce the dutiable value of his estate by donating to the trust each year the maximum amount which is not subject to donations tax. This amount is currently R 100 000, and if both the planner and his/her spouse donate the maximum amount each year (in other words R 200 000 per year),considerable accumulated estate duty savings may be achieved in this way.